World Trade: 'Coming Unglued'

Three cheers and a tiger, too, for Daniel Burstein. His article (Editorial Pages, Dec. 30), "Japanese Challenge Wall Street," for the first time begins to tell it like it is. However, the Japanese are not only challenging Wall Street, they are well along in the process of reducing the United States to the status of an economic colony.

Their tremendous industrial expansion and protectionist policies have given them such enormous trade surpluses that they have become the greatest creditor nation in the world. This in sharp contrast to our Administration's "free trade" policies, which have devastated our industries, and burdened us with enormous and growing foreign debts, budget and trade deficits.

As Burstein points out, the decrease in the value of the dollar, which was supposed to help our trade deficit, has had no beneficial effect at all. The November trade deficit of $19.2 billion is the highest monthly total on record. What it has done is make it possible for the Japanese to purchase major American properties at bargain prices. They have also bought such large quantities of Treasury notes that, as Burstein notes, "a top spokesman for the Industrial Bank of Japan recently suggested that the U.S. Treasury ought to begin issuing U.S. government bonds in yen."

The tale could get worse. The possession of large amounts of government notes in the hands of foreigners, when we have enormous budget deficits, could have not only economic, but political consequences as well. If, for example we try to change our "free trade" policies, which have brought us to our present plight, we may find the leverage possessed by other countries in U.S. securities will not permit us to do so.

The unfortunate truth is that we have been sold down the river by an actor President, who knows how to smile, but not much of anything else.